DOE expects LNG export review to take months, legal action possible
The US Department of Energy (DOE)’s evaluation of the impact of additional US LNG exports on the climate and economy should take “months, not years,” DOE deputy secretary David Turk told a Senate panel Feb. 8, countering Republican suggestions that the Biden administration’s LNG authorization pause was a full ban of future exports.
“Put simply, this temporary pause to update our analyses will not impact our ability to supply our allies with LNG,” Turk told the Senate Energy and Natural Resource Committee hearing. “This pause on additional approvals does not interfere with current exports nor other projects already authorized or under construction.” He noted that US LNG exports are already expected to double by the end of this decade.
Dr. James Watson, secretary general of Eurogas, an association representing 101 companies across the European natural gas sector, said the organization fears that the pause could preserve Russia’s grip on Europe’s gas supplies. The decision “will reduce the likelihood” that the March 2020 agreement between the White House and the European Commission that the US would provide 50 bcfy of additional LNG to Europe until 2030 would come to fruition, he told the Senate committee.
“There are few alternative suppliers of LNG that could contribute as much as the US to this objective to be independent from Russian gas,” Watson said, adding that this would “cause a loss of confidence in the US as a strategic partner for energy security in Europe.”
The White House, citing growing concerns over whether LNG exports are in the public interest, in January announced it would pause approval of new LNG export authorizations to non-Free Trade Agreement (FTA) countries, while the DOE conducts its study. Almost all current US LNG exports go to non-FTA countries, including those in Europe and Asia.
Watson questioned whether the move was a pause or a stop. "Where are we going to get our gas?” he asked, noting that Europe has agreed to buy gas now through 2049, ensuring a steady, growing LNG market. Watson’s testimony was interrupted by climate protestors.
Sen. Joe Manchin (D-WVa), chairman of the committee, suggested that the administration continue to review applications under the existing criteria until after the review is finished. They could then “come back” to Congress with the proposal. Democratic Senators Bob Casey and John Fetterman of Pennsylvania also have said if the decision puts jobs at risk they will push the administration to reverse the pause.
Biden’s political opponents said the LNG decision was a ploy to mobilize young voters and environmentalists, key Democratic constituents, ahead of the November presidential election.
Many suggested that legal challenges might ensue. Attorneys general from 26 Republican-led states, including Louisiana and Texas, laid out seven pages of legal arguments against the decision to halt LNG export authorizations.
In a Feb. 6 letter to the White House and DOE, the AGs argued that the Biden administration overstepped its legal authority. “As you should know, the Department ‘literally has no power to act—including under its regulations—unless and until Congress authorizes it to do so by statute,’” they wrote. The Supreme Court reversed an Obama-era power plant rule and the Biden administration’s proposal to forgive $400 billion in student loans based on a similar legal theory.
The AGs argued that the halt threatens the US economy and its diplomatic position while hurting US allies. Meeting allies’ natural gas demand “requires new export terminals leading to billions of dollars in capital expenditures and tens of thousands of new jobs,” the AGs wrote. The pause “jeopardizes” this without any “clear congressional authorization to issue this pause in the first place,” the AGs said.
DOE’s Turk, however, told the panel that Congress, through the Natural Gas Act (NGA), gave DOE responsibility to evaluate whether LNG export authorizations are “consistent with the public interest.”
The AGs countered that if the administration intended to rely on the NGA to allow the pause, “then you are mistaken,” they wrote. They said the NGA requires DOE to approve LNG authorizations “unless, after opportunity for hearing,” it finds exports would not be consistent with the public interest. The NGA creates a “general presumption favoring [export] authorization,” the AGs wrote.
Neither the White House nor DOE commented on the letter that was also signed by the state attorneys general of Kansas, Indiana, West Virginia, Alabama, Alaska, Arkansas, Georgia, Idaho, Kentucky, Mississippi, Missouri, Montana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, North Dakota, Tennessee, Utah, and Wyoming.
Turk told the panel that DOE’s review would focus on the effect of future LNG exports on US consumers and the competitiveness of US manufacturing; climate and environmental consequences, both near and longer term; worldwide long-term dependence on fossil fuel; and US energy security and “that of our allies.”
US LNG exports already authorized
US export capacity has more than tripled to 14 bcfd, making the US the world’s largest LNG exporter, Turk said. By 2030, when another 12 bcfd of US-sourced LNG export capacity that is already authorized and under active construction under final investment decisions is set to come on-line, that number will grow to up to 26 bcf/d, he added.
“A grand total of 48 bcfd has already been authorized, which is nearly half of total current US natural gas production [of 104.4 bcfd],” Turk said. “Let me underscore – the United States has already tripled our export capacity in just 5 years, becoming the world’s largest LNG exporter; our capacity may nearly double again by 2030; and total exports already authorized would nearly double that total again.”
Meanwhile, more than 150 Republicans, led by Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), sent a letter to President Biden Feb. 4 demanding his administration "expeditiously approve all pending applications to increase the global supply of natural gas."
Cathy Landry | Washington Correspondent
Cathy Landry has worked over 20 years as a journalist, including 17 years as an energy reporter with Platts News Service (now S&P Global) in Washington and London.
She has served as a wire-service reporter, general news and sports reporter for local newspapers and a feature writer for association and company publications.
Cathy has deep public policy experience, having worked 15 years in Washington energy circles.
She earned a master’s degree in government from The Johns Hopkins University and studied newspaper journalism and psychology at Syracuse University.